STV has announced it will close its struggling second channel STV2, as part of a broader shift towards online content and a reorganisation that will result in 59 job losses.

Publishing the broadcaster’s three-year growth strategy on Wednesday morning, STV’s new chief executive, Simon Pitts, who took over from Rob Woodward in January, set out plans to drive viewers to STV Player, with more than a third of profits expected to come from outside linear TV advertising by the end of 2020.

The closure of STV2, which was launched last spring following a merger of local and city digital services around Scotland, will mean the end of STV News Tonight, its flagship 7pm nightly news programme anchored from Glasgow by Halla Mohieddeen, with 25 jobs affected. The broadcaster had previously boasted that the second channel allowed the company to put Scotland’s first “Scottish Six” news programme on air.

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The five local TV licences that were part of STV2 will be sold to That’s Media, while wider restructuring of the news operation will result in a further 34 job losses and around £1m cost-cutting. STV’s head of news will also be replaced.

The cuts follow an announcement by BBC Scotland on Tuesday that its new TV channel for Scotland will be on air from next February, subject to Ofcom approval. The new channel had initially planned to start broadcasting in the autumn.

“We have had to make some tough decisions but I think STV has to modernise to prepare us for the current state of news consumption, in order to be able to compete as other organisations have done,” said Pitts.

“There are also competitive issues at play, BBC Scotland has 15 times the programme budget of STV2. To reach break even we would have had to increase the audience and commercial returns five-fold. BBC Scotland would have made that even more difficult than it already is.”

Reaction across the political spectrum has raised concerns about the future of the news sector in Scotland. The Scottish Labour leader, Richard Leonard, described the news of redundancies at STV as “painful”, noting that the new chief executive had recently accepted a £850,000 “golden hello” to start the job, while the Scottish Conservatives’ shadow cabinet secretary for culture, Rachael Hamilton, described it as a “hammer blow to broadcasting in Scotland”.

John Toner, national organiser at NUJ Scotland, said that the job cuts were a “devastating blow” to staff who had tried to make STV2 work for four years.

“This will lead to a massive reduction in the breadth and depth of news coverage viewers in Scotland currently enjoy,” he said. “The NUJ will work with STV management to try to reduce the number of redundancies required, and we are resolved that compulsory redundancies will be strongly opposed.”

In April, Alan Clements, the head of STV Productions, announced that he was leaving the company after a decade.